Daily market update: JD Sports, BP, Shell

Markets started Monday on the front foot as oil prices retreated and talks on trade and AI between the US and China made apparent progress.

Asian shares chalked up gains and these were replicated in Europe, which repaired some of the damage from Friday’s sell-off.

Comments from Donald Trump signalling he would ‘probably’ be open to meeting his Iranian counterpart at the UN General Assembly this week, and suggestions that shipments of oil and gas through the Strait of Hormuz are at a six-month high, helped pull oil down towards the $100 per barrel mark. This is still more than 40% above pre-war levels and firmly in alarm-bell territory in terms of the inflationary pressures it is unleashing, but at least the trajectory is more favourable. Government bond yields remained stable.

Gains for the FTSE 100 were constrained by index heavyweights BP and Shell both falling as oil retreated. Miners, banks and firms with links to the aviation and technology sectors were among those making progress as the week got underway.

Hopes of improved relations between the world’s two largest economies were boosted by US Treasury Secretary Scott Bessent describing weekend discussions with Chinese officials as successful. A meeting on Thursday between Donald Trump and Xi Jinping is likely to draw focus as investors look for a thawing in relations between Washington and Beijing.

JD Sports

JD Sports is to expand into Mexico via a franchise agreement. While the sports retailer is already established in multiple countries, it’s always a risk going into a new territory as there is inevitably a difference in how business is done, as well as from a cultural perspective.

Using a franchise partner who already knows the territory inside out is a lower risk way for a brand like JD to dip its toes in the water. The key question is why JD Sports hasn’t already expanded into Mexico, given it has a large population with millions of people who match its target audience by age.

The venture provides another growth lever and comes at an important time for JD, with other parts of its business finding it harder going. JD has suffered from shifting trends whereby appetite to buy expensive sports footwear is waning, and the US market is awash with discounting thanks to a more cautious consumer.